Minister puts shrimp industry on notice

Trevor Taylor, Minister of Fisheries and Aquaculture, today met with representatives of the shrimp industry and requested that they make a joint proposal by Friday, January 30 on how they intend to address structural problems in the inshore shrimp sector. In the absence of a joint proposal by January 30, Minister Taylor indicated that his department will have no choice but to unilaterally implement much-needed policy changes to address these concerns.

"In a meeting with union and shrimp processor representatives, I issued the message in no uncertain terms that the time for action has come. The government has received report after report, held countless meetings, and the two groups are still far apart. The only thing that everyone seems to agree upon is that the status quo is unacceptable for the 2004 season," said Minister Taylor. "I have consistently said that the shrimp industry, its employees, and the economy of Newfoundland and Labrador need stability. The fishery is roughly two months away, and if we are going to make any changes for this season, they need to be done in short order. If a mutual proposal is not presented to me within a little over a week, I will act in the best interests of the province.

"My message is that there has been enough talking. Industry must present me with a common solution by January 30 or government will impose a solution in the best interests of the shrimp industry. The shrimp sector has faced very difficult circumstances in recent years, and 2004 is likely to be even more difficult, especially in light of the strengthening Canadian dollar. For this sector to remain viable, major changes are required to how shrimp is harvested, landed, and processed. If the industry is not prepared to make the changes themselves, I am not going to sit idly by and see the shrimp fishery decline further. It is my preference to support an industry-driven solution, and if one is not presented to me, then I will impose one."

The rapid growth of the industry has lead to structural problems and disruptions in the fishery. The inshore shrimp sector has caught its entire annual allocation only once in the past seven years. This is a substantial loss of economic benefits to the province in general, and a substantial loss of employment for plant-workers and harvesters. The quota allocated to the inshore sector has increased from about 3,100 tonnes in the 1996 (Gulf Fishery) to a combined total allocation of over 50,000 tonnes in 2003.

Minister Taylor recognizes that the Newfoundland and Labrador shrimp industry has a number of competitive advantages. "In a world context, our cooked and peeled shrimp industry has many things to be proud of. There is a strong resource, our shrimp on average are larger in size than our competitors, ours is a single frozen product, there are world-class modern processing facilities, a competitive work-force, and we are near some of the largest markets in the world," said Minister Taylor. "These positives suggest that a stable shrimp industry can be viable and lucrative for all participants."

The 2004 shrimp fishery is facing continued instability, however, and has not acted on reports that have been commissioned. Following a two-month shutdown of the fishery in the summer of 2001, the industry asked government to initiate a study of the problems in the sector. In April 2002, the Report of Inshore Shrimp Panel was released, highlighting the sector�s key problem areas and identifying recommendations for moving the industry forward. In 2003, soft market conditions continued to exacerbate the problems in the industry, and the fishery in the Gulf of St. Lawrence again shut down for two months. Following that shutdown, the Fish, Food, and Allied Workers (FFAW) and the Fisheries Association of Newfoundland and Labrador (FANL), together with government, jointly funded the development of an Implementation Plan for the Shrimp Panel Report. The plan was developed by a working group of harvesters and processors, and recommends structural changes in the industry, such as vessel scheduling, a central distribution desk, and improved price settling mechanisms. Due to lack of consensus within the industry, the recommendations in these reports have not been implemented, and the many problems in the fishery still exist.

Minister Taylor is concerned about the threat or act of another shutdown and recognizes that these issues must be addressed promptly. "Change is very difficult and there is a great deal of mistrust amongst harvesters and processors at present. It was the general consensus of the working group that the implementation plan was necessary. Everyone understood that this plan would lead to much greater stability and viability in the inshore shrimp harvesting and processing sectors," said the minister. "Unfortunately, in my recent meetings with both parties, it has become clear to me that this consensus is eroding. This is unacceptable and, for the good of our province, the parties must agree to address key structural issues now."

Media contact: Alex Marland, Communications (709) 729-3733

2004 01 22                                        3:40 p.m.